The Bloor Perspective: IBM goes large, Napster puts its case, and why Lane left Oracle

IBM has made a couple of recent announcements that show it is still at the forefront of IT hardware development. Following on from its new range of NetFinity and RS/6000 servers, it has now come up with the world's fastest supercomputer, ASCI White. This announcement came only two days after IBM Research released details of its Memory Expansion Technology (MXT) that will double the capacity of Intel-based servers.

MXT is a hardware solution that speeds up the performance of memory by placing the most frequently accessed data closer to the computer's microprocessors. Less frequently used data, in addition to being held further away from the processors, is compressed and cached elsewhere. In this way the overall capacity is increased and performance is optimised.

ASCI White is an RS/6000 SP system delivered to the US Department of Energy (DoE) to help it keep control of the nation's nuclear weapons stockpile and to ensure it remains available without needing real tests to be carried out. In testing, ASCI White (named after the Accelerating Strategic Computing Initiative project) achieved 12.3 trillion operations per second (teraflops) which is more than three times faster than the previous record. ASCI White is powered by 8,192 microprocessors and has six terabytes of memory and 160TB of disk storage. According to the requirements of the ASCI project, this delivery represents the middle achievement of a multi-year plan. The project calls for 1, 3, 10, 30 and 100 teraflop systems to be built over a number of years.

With the delivery of ASCI White and the announcement of MXT, IBM has demonstrated its ability to be innovative and also deliver solutions at both ends of the scale. MXT will be seen in a future range of NetFinity servers and could result in a cost reduction, as less memory is required to support business applications. This development is even more important given the current scarcity of Rambus memory.

It's always exciting to see the boundaries of computing power extended by a new supercomputer. At 12.3 teraflops, ASCI White represents a big step forward and, if it proves successful, much credit must go to IBM.

*Napster fights back*

Far from shrinking under the baleful glare of the Recording Industry Association of America (RIAA) and its lawsuits, Napster has come out in strong defence of its actions. Music distribution will change forever if Napster is able to prevail against the entrenched interests of the music business. The company, whose website supports the sharing and exchange of recorded music, unequivocally asserts that the non-commercial sharing of music is "common, legal and accepted". Certainly, it is common and widely accepted. But Napster claims solid evidence for what many have long suspected - exchange of music doesn't harm sales.

A key part of Napster's argument is that many of its users download music to decide whether to buy. The claim is backed up with the statistic that sampling is the main motivation for over 84 per cent of Napster users studied. The RIAA's expert evidence confirmed the claim. Moreover, CD sales are up 8 per cent this year, suggesting that effective digital recording devices combined with Internet capabilities are failing to dent sales.

Napster points to a significant degree of hypocrisy by the recorded music industry. For example, Sony is a plaintiff in the case against Napster, but also markets a portable MP3 music player. The unit is promoted for use with music from the internet with scant mention of copyright issues. In fact, Sony's advertising exhorts customers to download music from their favourite websites.

A further swipe at the music industry appeals to popular consumer sentiment by suggesting that the record companies are using copyright as a means to sustain high prices. Although repeated studies have failed to show that CD prices are too high, consumers remain suspicious.

Napster suggests that information revealed by the legal discovery process confirms anti-competitive actions by record companies. Whatever the outcome of the lawsuits, Napster is making a strong showing in the battle for public support.

*Lane Leaving Oracle*

In a terse announcement two weekends ago, Oracle revealed the departure of its president, Ray Lane. Oracle also denied that there was any link between this and the recent Oracle scandal, now being referred to in the US as 'Trashgate'. But the only connection between this and the departure of Ray Lane is one of juxtaposition.

Mr Lane was brought in to Oracle eight years ago to take operational responsibility - while Larry took a back seat - and he brought success. However, it is no secret that the relationship between Larry and his president was stormy and rumours of Lane's impending departure have been circulating now for about a year. There were whispers that he may have gone to any of Compaq, HP or Novell at one point or another and, almost inevitably, Lane will scoop the next 'big time' IT job that opens up.

As for Oracle, our information is that Oracle has been preparing for Ray Lane's departure for quite some time, with Larry Ellison taking the reins on all new Oracle initiatives. Oracle's third in command, Gary Bloom is widely being tipped as the successor. Bloom is credited with the success of Larry's cost cutting initiative, which has seen Oracle cut internal costs by over $1bn through a process of globalisation, centralisation and leveraging of the internet. Oracle's shares have rocketed accordingly.

In any event, it is possible that Oracle decided the news of Lane's departure would be treated negatively and chose this moment for the divorce as they were already getting negative flack from 'Trashgate'. Whether the market reacts negatively or not, we see this as positive news for Oracle.

In our view Oracle is undergoing an ebusiness transformation internally which many organisations in the IT sector would do well to copy. This ebusiness initiative came directly from Larry Ellison and was implemented by Bloom. So we doubt if Ray Lane's departure will affect Oracle's momentum. And regarding 'Trashgate', Ray Lane may not even had any
knowledge of it.

* Further analysis is available at http://www.it-director.com